Comfort Delgro

This time the gravy train seemed to be flowing without an end in sight.
Not going to stop anytime soon. Partly fueled by cheap money.
The exact same phenomenon can be seen by the bike sharing companies.
Only difference is that Uber and Grab can be very profitable if one manages to monopolize and force the other party out.(Or merge, can happen) Bike share, there is no foreseeable route to profitability at all.

There was a bread war(for those old enough) that went on between gardenia and sunshine(incidentally held by listed companies here as well and both are doing well now). So my best guess they will somehow work itself out, incentives to both the drivers and the customers will stop sometime in the future. So enjoy the cheap promo fares and free bicycle rides while you can, chances are they wont last forever.

I have a slight different opinion, or maybe an more optimistic one.

The biz approach is to get into scale, and amass sufficient data to get insights. The insights enable micro-managed the customers and likely the suppliers (taxi drivers), rather than the old one-size-fit-all approach. I don't know the "maturity" of the "insight" right now with Uber/Grab, but it should be better over time. The recent dynamic pricing for taxi fare, is one enabler for the micro-management.

One catalyst for the biz, is the driverless technology. I don't know how it will pan out, but it will definitely reduce the cost significantly in near future.

Amazon approach is similar. It has the "insight" on customer behaviour, thus able to sell few products below cost, and recoup from other products, with reasonable confidence, and remain profitable.

(not vested, but observing)

Strike at the enemy at lightning speed before they strengthen themselves after unity? Will it actually create a rebound effect - in the sense that both Uber and CDG are pulled into a "siege mentality" and come to agree to terms of their collaboration more easily now than it would been?

Grab tries to woo ComfortDelGro cabbies with big rental discounts

SINGAPORE — Ride-hailing firm Grab has launched one of its most aggressive moves yet against its chief rivals, dangling heavily discounted rental rates — shaving off about half of what they are currently paying in some cases — to entice ComfortDelGro’s taxi drivers to jump ship.

The offer, which was broadcast to tens of thousands of ComfortDelGro drivers via text message on Sunday night — comes less than two weeks after Singapore’s largest traditional taxi operator announced talks with Uber on a potential tie-up.

http://www.todayonline.com/singapore/gra...k-uber-tie

I talked to driver, whenever I took a CD taxi. The feedbacks were CD still an attractive option for them. It is not for its call center (no longer relevant after Uber/Grab apps), but the excellent map tool. Uber/Grab map tools are still lacking. My relatives are often facing issues with GrabCar on the wrong pick-up point, maybe due to its poorer map tool.

SEA is Grab turf, and CD is the market leader in Singapore. Grab vs CD is an easy task, but Grab vs CD+Uber is probably a survival fight. Grab is targeting on CD now. It is a bad news to CD, IMO

I refer to this ST article dated 5 Sept 2017
http://www.straitstimes.com/singapore/tr...1504616898

The article said "the market is simply not big enough to support a taxi/private-hire fleet size of more than 70,000 - up from 28,000 cabs before Uber and Grab entered the fray in 2013". The author also did some workings based on assumption and worked out to 4.6 trips per day per private-hire car for the current over supply situation. However, it takes seven to 10 trips (average 10km/trip) to cover daily rental and fuel.

There is not enough passengers to go around. Eventually some drivers will quit and look for other income. I wonder if the private hire or taxi fare will come down to attract more passengers. Anyway, the industry will eventually find equilibrium, hopefully it does not take too long.

If there is an acute oversupply of vehicles, but my revenue is the same across Uber/Grab/Comfort; personally I will see whose cost is lowest. Diesel taxi may be cheaper than private car, but if the lower rentals of private car offsets diesel, i will take the the car.

Comfort cant run away and as said in this forum, they will definitely have to lower prices to match the private cars but at i) at what cost, ii) how long can it sustain when Uber/Grab are just getting equity funding from the likes of Temasek and Toyota Motors.

Its the same as online retailers (Lazada) vs brick/mortar shops like Courts and Challenger. Lazada is selling items cheaper than challenger but is spilling red ink to the tune of few hundred million losses per year, the luck is that alibaba etc are just pumping cash in.

To quote: "(Price)War does not determine who is right - only who is left"

ComfortDelcro is Temasek-linked.

Grab is partially funded by Vertex Venture Holdings (subsidiary of Singapore sovereign wealth fund Temasek Holdings).

What are the chances Temasek step out to stop both parties from bleeding?

(07-09-2017, 09:06 AM)nitro Wrote: ComfortDelcro is Temasek-linked.

Grab is partially funded by Vertex Venture Holdings (subsidiary of Singapore sovereign wealth fund Temasek Holdings).

What are the chances Temasek step out to stop both parties from bleeding?

I reckon Temasek has no controlling stake on Grab. Of course, it has the right to exit.

Taking lessons from SBS and SMRT, political agenda outweigh that of the monetary agenda. Public service is still the number one objective of the government.

On another note, ultimately, grab is still a private company with multiple major shareholders and thus bottom line matters in time to come.

Sent from my SM-G930F using Tapatalk

(06-09-2017, 07:52 PM)Millionfaith Wrote: I refer to this ST article dated 5 Sept 2017
http://www.straitstimes.com/singapore/tr...1504616898

The article said "the market is simply not big enough to support a taxi/private-hire fleet size of more than 70,000 - up from 28,000 cabs before Uber and Grab entered the fray in 2013". The author also did some workings based on assumption and worked out to 4.6 trips per day per private-hire car for the current over supply situation. However, it takes seven to 10 trips (average 10km/trip) to cover daily rental and fuel.

There is not enough passengers to go around. Eventually some drivers will quit and look for other income. I wonder if the private hire or taxi fare will come down to attract more passengers. Anyway, the industry will eventually find equilibrium, hopefully it does not take too long.

I dont quite understand the calculation in arriving at 4.6 trips per day, but I am very sure this number is not correct. I am a Uber driver for more than 2 years already. While it is true that more drivers are competing for passengers, but I can still comfortably get, on average, 5 trips in the morning from 7.30am to 10am. However, the average fare/trip has gone down over times, a sign that supply is increasing faster than demand. Also, it is a fact that Uber is losing competiton to Grab, and the gap between them seems to be widening. So, I believe CDG and Uber will try to make the marriage works, to fight the competition.